October 27, 2023/CSL Research

Stanbic’s 9M 2023 unaudited numbers showed a 72.4%y/y increase in Interest Income to N184.6bn driven by improved yields on risk assets. Q/q (Q3 2023 compared with Q2 2023), Interest Income was up 24.2%. Net Loans to customers was up 46.3% in 9M 2023 compared with the December 2022 position (inclusive of the impact of the devaluation on foreign currency loans). Interest Expense also grew strongly, up 133.9% y/y to N64.1bn. Q/q, Interest Expense was up 12.6%. Customer deposits were up 42.3% in 9M 2023 (also inclusive of the impact of devaluation) compared with December 2022. Overall, Net Interest Income grew 51.3% y/y to N120.5bn in 9M 2023.

STANBIC IBTC 9M 2O23

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Source: Company’s Financials, CSL Research.

Net Fee and Commission was up 16.2% y/y and 8.2% q/q mainly driven by growth in asset management fees (Up 21.3%y/y) to N52.4bn in 9M 2023 from N43.2bn in 9M 2022.

Other Income (Income from life insurance activities, trading Revenue and Other Revenue) grew significantly, up 140.7% y/y to N62.4bn but declined 46.1%q/q. The y/y growth in Other Income was due to a 140.1% y/y growth in trading revenue on fixed income and currencies to N59.7bn

The group reported Impairment Charge of N9.96bn in 9M 2023, 33.5% higher than N7.46bn reported in 9M 2022 bringing 9M 2023 annualised Cost of Risk (COR) to 0.9%. Non-performing loan to total loan ratio was up slightly to 2.5% compared with 2.4% in December 2022.

Operating Expenses grew 26.0% y/y but declined marginally by 0.4% in Q3 2023 compared with Q2 2023 The moderate y/y growth in OPEX compared with the strong growth in Total Operating Income (+50.8% y/y) led to an improvement in Cost to Income Ratio (CIR ex provisions) to 46.9% in 9M 2023 from 56.1% in 9M 2022.

The group’s Pre-tax Profit was up 87.8% y/y to N129.5bn in 9M 2023 while Net Profit grew higher by 98.0% y/y to N109.2bn, bringing 9M 2023 annualised ROAE to 33.2%.

Under segment reporting, Business and Commercial banking reported a Pre-tax profit of N13.1bn in 9M 2023 compared with Pre-tax profit of N7.5bn in 9M 2022 while Corporate and Investment Banking reported Pre-tax profit of N79.6bn in 9M 2023 compared with N39.1bn in 9M 2022. The Consumer & High Net Worth business reported Pre-tax profit of N36.8bn in 9M 2023 compared with N22.4bn in 9M 2022.

The Group’s total capital adequacy ratio closed at 17.9% (Bank:14.9%) which is higher than the 11% minimum regulatory requirement.

We have a BUY recommendation on Stanbic. Our estimates are under review.

Kindly click on the below link to download the full report.

​​​​​​​​​Stanbic IBTC 9M 2023 Quick Take.pdf​